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Byline: Paul Katzeff
Investor's Business Daily
Mere days before Christmas, when President-elect George Bush warned that the economy was slowing quickly, he drew howls of protest from the retailing industry.
But Bush was saying out loud what a lot of consumers - as well as investors - had begun to fear. The economy is indeed slowing rapidly. Consumers fret whether it's safe to spend money. Investors, too, wonder if they should sell sinking stocks and funds and park
the proceeds in cash.
"It is against human nature to stay put when you're feeling pain," said Louis Harvey, president of Dalbar Inc., a financial services research firm in Boston."When the market is down, people naturally want to flee."
And the markets of 2000 were way down. All major indices lost ground. The S&P 500 index finished in negative territory for the first time since 1990. From its March peak, the tech-heavy Nasdaq composite surrendered more than 51% of its gains.